JGB TECHS: (Z5) Just Off Cycle Lows

• RES 3: 140.08 High Jun 13  
• RES 2: 139.05 High Aug 4 
• RES 1: 137.30 - High Sep 8 and key short-term resistance
• PRICE: 135.76 @ 15:57 GMT Nov 10
• SUP 1: 135.58 - Low Nov 10
• SUP 2: 135.39 - 1.618 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)
• SUP 3: 134.69 - 2.000 proj of the Aug 4 - Sep 2 - Sep 8 swing (cont.)  

Prices started last week well, growing the gap with next support into the 135.61 Oct 08 low. Despite this stability, prices remain inside the firm downtrend that’s dominated prices since mid-September, and prices will need to challenge resistance before signaling any broader reversal. Key short-term resistance has been defined at 137.30, the Sep 8 high. Further weakness would open 135.39 next, a Fibonacci projection. 

The cold snap across the eastern US drove gas prices higher at the start of Monday reaching a peak of $4.509 during the European session it then fell to a low of $4.262 but finished up 1.4% to $4.375, around where it is Tuesday, and is now around 6% higher in November. Temperatures are now forecast also to be lower across most of the US mid-month increasing heating consumption, while demand for LNG exports is strong. 

• US LNG exports reached around 18bcf/d on the weekend, a record (Bloomberg), but US output was also at a record. Europe has become a favoured destination for non-contracted shipments.
• BNEF data showed that US lower-48 gas demand rose 30.6% y/y on Monday to its highest since the start of March as the Polar Vortex impacted the east of the country. Production was up 12.1% y/y. Flows to LNG export facilities +5.3% w/w.
• European gas continued to trade in a narrow range as it waits for information on the outlook for the upcoming winter and changes to supply developments. They fell 0.6% to EUR 31.01 on Monday to be down slightly in November as LNG imports remain strong, especially from the US. They have been trending higher since mid-Q3. Prices reached EUR 31.44 early in the session before falling to EUR 30.765. 

• RES 3: 95.982 - 76.4% retracement Sep’24 - Nov’24 downleg
• RES 2: 95.960 - High Apr 7 (cont.)
• RES 1: 95.900 - High Oct 17
• PRICE: 95.620 @ 15:43 GMT Nov 10
• SUP 1: 95.510 - Low Sep 3  
• SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14 
• SUP 3: 95.275 - Low Nov 14  (cont) and a key support

Aussie 10-yr futures slipped lower last week on the back of hotter-than-expected inflation data. This returned prices lower despite nascent signs of a technical recovery as recently as late October. The sustainability of the pullback will be dependent on prices holding above key short-term support at 95.510, the Sep 3 low. Near-term resistance remains 95.780, the Sep 12 high. A clear break of this level signals scope for a continuation higher and opens 95.960, the 76.4% retracement level for the Sep’24 - Nov’24 downleg.